April 29 (SeeNews) - Romania's consolidated budget was in deficit equivalent to 2.06% of the gross domestic product (GDP) in the first three months of 2024, widening from a 1.42% budget gap recorded in the same period of 2023, the finance ministry said.
The consolidated budget deficit totalled 35.88 billion lei ($7.726 billion/7.211 billion euro) in the first quarter of 2024, as revenues rose 15.8% year-on-year to 132.16 billion lei, whereas spending increased by an annual 22.7% to 168.04 billion lei, the finance ministry said in a statement on Friday.
The rise in revenues was mainly supported by current revenues, such as insurance contributions, VAT payments, and payroll taxes, as well as by the inflow of European funds. Amounts reimbursed or granted by the EU totalled 12.33 billion lei in the first quarter, jumping 31.9% on the year.
Total spending was equivalent to 9.66% of GDP in the first three months of the year, up by 1.13 percentage points on an annual comparison basis. Social assistance expenditure amounted to 33.8% of total spending, while staff expenses and the costs of goods and services accounted for 21.7% and 12.9%, respectively.
Investments totalled 22.5 billion lei in the first quarter, growing 1.7 times over the same period of 2023. Non-refundable external financing represented 39.6% of total investment expenditure.
Romania’s budget plan for 2024 projects a budget deficit equivalent to 5% of GDP at the end of the year and higher revenues spurred by an expected economic growth of 3.4%.
In February, the International Monetary Fund (IMF) projected fiscal deficits exceeding 6% of GDP for Romania in the next few years. Therefore, the global lender urged the country to boost its fiscal consolidation efforts to restore the soundness of government finances by enacting substantial policy reforms.
In March, European Commission (EC) officials visiting Bucharest said they were “very concerned” about Romania’s fiscal standing and that they were expecting a further widening of the country’s budget gap.
(1 euro=4.9758 lei)